Business Model vs Business Plan

How do you explain the difference between a  business model and business plan? I recently tried and struggled to explain. Found this excellent post by Steve Blank here.

Business Plan

A business plan is the execution document that existing companies write when planning product-line extensions where customer, market and product features are known. The plan is an operating document describes the execution strategy for addressing these “knowns.”

Entrepreneurs treat a business plan, once written, as the culmination of everything they know and believe. All they need to do is add money and magically that five-year forecast in Appendix A will simply happen if they execute to the plan.

 Business Model

A business model describes how your company creates, delivers and captures value. A business model is designed to change rapidly to reflect what you find outside the building in talking to customers. It’s dynamic and it reflects the iterative reality that businesses face. 

References:

Validate Your Business Model Start With a Business Model, Not a Business Plan

No Plan Survives First Contact With Customers – Business Plans versus Business Models

From Business Models to Business Plan

Happy Learning!!!

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